According to a recent OECD report, climate finance from developed to developing countries reached $115.9 billion, surpassing the $100 billion threshold for the first time in 2022. Developed countries at COP 15 in Copenhagen in 2009 committed to contribute this amount annually until 2020. The target was not being met, leading to the deadline’s extension to 2025. A new goal, the New Collective Quantified Goal (NCQG), will replace this commitment, marking a significant shift in the climate finance landscape. This new goal was the basis for the just concluded, two-week-long Climate Change Conference in Bonn, Germany, that began on 3rd June, bringing together over 8,000 delegates worldwide. Also known as the Sixtieth of the Subsidiary Body (SB60) meetings, the conference paved the way for what will be agreed upon at COP29 in Baku, Azerbaijan, in November this year.

Ali Mohamed, the incoming African Group of Negotiators chair, during an interview with journalists. PHOTO BY GEOFFREY KAMADI.

Our writer, GEOFFREY KAMADI, sat with the incoming chair of the African Group of Negotiators (AGN), ALI MOHAMED, on the sidelines of the conference, to talk about Africa’s expectations from the new climate finance goal, among other climate finance issues leading up to the talks in Baku, also variously described as the “climate finance COP.”

Can you discuss the effects of climate finance, which is advanced to African countries through loans? How has this helped or hindered African countries from effectively dealing with the effects of climate change?

First, it’s important to note that climate finance is not outside the global financial frameworks that are in place. Many governments on the African continent, like much of the rest of the world, rely on borrowing from multilateral development banks and international financial institutions. However, the challenge that Africa faces is the exorbitant cost of capital. The cost of capital to African countries is at least five times the cost for other parts of the world, particularly the developing world. This ranges between 5-10%, an excessive cost of capital because of perceived risks that are not genuine. This high cost of capital significantly hampers our ability to respond to climate change and implement our developmental priorities that will contribute to climate action. So, this is the urgent challenge that Africa faces. And because of the excessive cost of capital, the debt situation in our countries has continued to balloon. The Africa Group of Negotiators is actively pushing to ensure that international financial architecture is addressed and debt sustainability becomes part of the climate finance dialogue, demonstrating our commitment to finding solutions to these financial challenges.

Also, climate finance should not be provided in the form of loans. This is the position that we are pushing for. However, if this should be disbursed as loans, it must be through concessional financing.

How significant is the New Collective Quantified Goal from an African perspective?

In light of the worsening climate situation around the world, the work that the global community is doing here is to see what the flow of climate finance to the developing countries will be, given that the $100 billion has become a drop in the ocean. The African group has been pushing for $1.3 trillion annually [by 2030]. However, there are other figures that experts have proposed, including the $2.4 trillion [by the Independent High-Level Expert Group on Climate Finance. That is the magnitude of the impact that needs to be responded to because of climate change. As we go to Baku, we hope there will be progress in arriving at a figure that we hope will be accessible to developing countries, including ourselves.

Given that climate finance is the focus of COP29, what do you say about the concern expressed by civil society groups that the negotiations here are being steered away from climate finance issues, which will create a problem going to Baku?

The mandate for COP29 in Baku is to deliver on the New Collective Quantified Goal on climate finance that we were given from the previous COPs. We must deliver on this mandate. Then the question becomes:  how do we deliver this mandate, how much are we looking at, and in what form will this climate finance goal take? But I don’t think there is any possibility of the global community not delivering, and as Africa Group, we are pushing to arrive at that figure [of $1.3 trillion per year by 2030].

Do you think the $1.3 trillion target the Africa Group of Negotiators is pushing will be realized?

I think it will be realized. You may want to know that Kenya, through the leadership of President William Ruto, together with France, Barbados, and Colombia did set up a task force– we call it the Global Solidarity Levies Taskforce – to look at how we can raise the needed financing for climate and nature crises. That task force is currently looking at the aviation and shipping levy potential, fossil fuel taxation, and many other opportunities to raise climate finance. And once the task force finalizes its report, we will be able to see how we will present it to the international community. And indications suggest that it is possible to raise significant amounts of money from areas that currently are not contributing to the response to climate change.

Have you progressed at this conference on climate finance, adaptation, mitigation, and loss and damage?

You cannot be here for two weeks without making any progress. There is no money on the table at the moment, but there has been a good conversation that has taken place that looks at how, how much, and from whom to raise money. But of course, that takes time because 194 countries are deliberating on a subject. And, of course, there is resistance from the developed country parties, who don’t want to be burdened with the cost of climate finance. There is, however, a responsibility under the convention for developed countries – the primary cause of the emissions accumulation in the atmosphere – to pay for that cost.

Has this conference met the expectations of the African Group of Negotiators? What has not been achieved?

The expectation was to conclude several thematic agenda items. The finance bill was one of them. Mitigation is another. Adaptation is another. So far, up to five or so agenda items have been agreed upon on agriculture and capacity building. There has also been good progress on technology and gender. However, adaptation is still tricky. Finance was also supposed to make progress. We are not there yet, but we think between now and Baku, there will be opportunities for virtual discussions at the level of heads of delegations to advance the talks so that by November, we will be very close to a final decision.

How will the establishment of the Loss and Damage Fund at the last COP in Dubai go to benefit African countries?

At COP 27 in Sharm El-Sheikh, the global community endorsed the establishment of the Loss and Damage facility, which was operationalized at COP28 in Dubai last year, with an initial capitalization of about $700 million. This was an excellent achievement for the global community, particularly for the most vulnerable countries that continue to suffer and are impacted by the ever-worsening and intensifying climate impacts. Our African countries are among the most vulnerable, and we look forward to benefiting from the Fund. It is still in the initial stages. The Loss and Damage Fund board is looking at the modalities and procedures, so the money has not started flowing, but it was a step in the right direction.